Extra Days in Billing Cycle May Have Some Electric Customers Paying More

Friday

Jun 21, 2013 at 4:01 PMJun 21, 2013 at 11:41 PM

LAKELAND | Lakeland Electric officials know some customers will receive inflated bills in July.But unless the customers call in, point out the problems and ask for a fix, the utility plans to keep a few extra dollars for itself.

By JOHN CHAMBLISSTHE LEDGER

LAKELAND | Lakeland Electric officials know some customers will receive inflated bills in July.But unless the customers call in, point out the problems and ask for a fix, the utility plans to keep a few extra dollars for itself.The issue occurs when customers pay additional charges because of extra days on their bills. Sometimes those extra days cause customers' usage to go up enough that they must pay a higher rate. Customers who use more than 1,000 kilowatt hours, for example, are bumped into a different, more expensive tier for the electricity used above that level. Using more than 1,500 kwh bumps the customer into another tier. The same situation applies to water rates. If a customer uses more than 8,000 gallons or more than 13,000 gallons they are pushed into more expensive tiers for the number of days of increased use.Some of the customers could pay an additional $2.50 based on the tiered rates, utility officials have said. A reduction in the number of meter readers from 20 to eight because of the addition of smart meters caused the utility to change its billing cycle. Meter readers are needed now only for water.The change impacts about 40,000 of the 57,500 customers who receive both electric and water service from the city. The remaining 64,000 electric customers will not be impacted.Approximately 31,600 of the customers will receive bills from one to 14 days later in July for service covering 31 to 46 days, said Alan Shaffer, deputy general manager at Lakeland Electric. Bills normally cover a period of 29 to 34 days, said Joel Ivy, general manager of Lakeland Electric.About 8,900 customers will get bills one to 14 days earlier in July, and they will cover for only 16 to 29 days.Customers who have a bill that exceeds 30 days can call customer service at 863-834-9535 to arrange a payment plan. Also, the utility can calculate a customer's bill to ­determine whether the customer was bumped into a new tier. Letters were expected to be sent Friday to the impacted customers.

‘WINDFALL FOR THE CITY'Some city commissioners said utility officials should not require Lakeland Electric customers to make the change. "You can technically call this a windfall for the city, albeit not that large," Commissioner Howard Wiggs said during a recent Utility Committee meeting. "Why wouldn't we recalculate that?"A lot of people won't call.""We shouldn't treat customers like that," Commissioner Justin Troller said after the meeting. "The way to handle it is let's call the customers and adjust the bill. "That's how we operate, though."Utility officials said the vendor they use for billing, however, can't make the change."We've talked with the vendor, and this is unheard of in the industry to recalculate rates for one month only," said David Kus, assistant general manager for customer service. "There is no way to predict what the bill in July would be to credit your account."Wiggs said he wasn't asking for a prediction. He said he just wanted to know why customers have to call in to make the change.Ivy said it's unclear how many customers will be impacted."We're going to work with people to get through it," Ivy said. "Ideally, we would take thousands of bills and sort through them, but that would be costly."We're asking customers to work with us on this one."Commissioner Keith Merritt, who was out of town and did not attend the meeting, said he'd like to know what the financial impact would be for the utility to calculate costs rather than requiring customers to call. "They have to get their money back," Merritt said of customers.He said the utility could figure out who is bumped into a new category, then possibly reimburse all the customers. "Maybe we could have a broader definition of who those customers may be," Merritt said. Or, he said, the utility could identify each customer impacted by the extra days, then reimburse the customer.Lakeland Mayor Gow Fields said that, in a perfect world, the utility would be able to reimburse customers without asking them to call."Our software billing system is not designed to run that query," Fields said. "We could hold the bill, sit people (employees) down and do manual calculations and then the bill would come late."There is no other way."Fields said that to create a different process for an event that happens once would be more cumbersome "than telling our customers to please call us.""Admittedly, it's not ideal, but we knew as we were transitioning that we would get to this point," he said. "There are certainly alternatives, but those alternatives would add cost."Commissioner Edie Yates said the higher bills because of the tier system will be very isolated. Yates said she was more concerned about letting customers know the utility will work with them if they have an issue with their bills. Commissioner Don Selvage said he didn't know how much money and work it would take to identify the customers impacted by the larger bills."I would like for them to minimize the impact as much as possible," Selvage said. He said he was surprised when he heard that the utility couldn't fix the problem by computer. Commissioner Phillip Walker said it should be a small number of people who are impacted by the additional charge from an extra tier. Walker said he didn't have a problem with the utility asking customers to call about an extra amount on their bill.

TIERED BILLING SYSTEMThe tiered system, implemented in 2002 to encourage conservation, is not normally adjusted for bills for more than 30 days of use, which happens routinely during the year.That means a customer who pays an extra charge after 30 days for moving into a different tier isn't reimbursed. "We have not made adjustments for a normal monthly billing that may have varied plus or minus a few days usage due to the actual meter reading dates, but we have when this type of re-routing activity has resulted in larger billing cycle deviations," Shaffer said.Utility officials did not provide answers to several questions about the tiered system. The utility was asked:How many Lakeland Electric customers are typically billed for more than 30 days of usage each month? How many are placed into a different tier because of the extra day or days?How much extra money has Lakeland Electric received from customers for placing them into different tiers?"We do not have that information, and it would be prohibitive to try and compile it if we could," Shaffer said.The upcoming situation is not the first time Lakeland Electric has used an extended billing cycle.In 2009, Lakeland Electric mailed 63,000 bills that charged its customers for at least 35 days of electric usage and, in some cases, 40 days. At that time, utility officials said Lakeland Electric normally bills for 28 to 32 days. Part of the problem in 2009 was that the city delayed meter readings until the first of the month, when a fuel-adjustment charge changed.Kus said at the time that there was one additional charge of up to $2.50 for customers who used more than either 1,000 or 1,500 kwh usage levels.He said then that the utility had no plans to rebate money to customers because it would cost too much to figure it out.

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